The latest great Alaska gold rush.

• Author: Gudde, Levi
• Position: Gold mining industry

Exciting things are happening in the Alaska gold mining industry. Yet the big excitement may be still to come.

The great Alaska gold rush started as a whisper in the late 1880s, grew to a roar in 1897-98, then gradually dropped back to a whisper in the early part of this century. And it pretty much staved that way until now.

But that's all changing these days as the cry of "Gold!" goes up once again from Southeast Alaska to the Brooks Range, from Northway to Nome.

This time it's being heard somewhere else as well. It's being heard in the halls and board rooms of some of the world's largest international mining companies.

This new interest in Alaska gold is driven, in part, by an increasing world demand for the precious metal. Industrial use is steadily increasing, particularly in the rapidly growing and developing electronics, computer, and communications fields.

It also comes from the Far East and Pacific Rim countries, such as Japan, where domestic demand for jewelry jumped almost 70 percent in the late 1980s, according to Alaska Geographic's recent publication "Rich Earth: Alaska's Mineral Industry."

Also contributing to the world-wide demand, according to John Lutley, president of The Gold Institute, an international trade association representing more than 80 companies in the mining, banking and refining fields, is the continuing development of free market economies in. such highly populated places as India, China and Taiwan.

According to Lutley, as the standard of living rises in these countries it creates a larger middle class with more wealth and disposable income.

"This is wealth and income that they usually convert into gold coins and jewelry because of a lack of confidence in their country's governments and paper money," Lutley continues. "They also have few local banks or savings institutions available to them.

"This trend is probably going to continue into the foreseeable future," says Lutley. "From the world perspective, we are simply going to need more and more gold just as some of our more traditional sources, such as South African gold mines, are going into decline."

CYPRUS-AMAX Fort Knox Mine Interior Alaska

One of the major international mining companies working to help fill this need with Alaska gold is Cyprus-Amax Minerals Co. The company owns 51 percent of Amax Gold Inc., which is developing a giant, world-class, open-pit gold mine in the hills 25 road miles northeast of Fairbanks.

The mine is on the way to becoming the biggest gold mine in North America and is expected to move from construction to production phase late this year. Ken Pohle, the mine's general manager, says the company expects to pour its first gold by November.

The Fort Knox Mine, with proven and probable reserves of more than 4.1 million ounces of gold, is operated by Fairbanks Gold Mining Inc., a subsidiary of Amax Gold Inc. It is expected to produce at least 300,000 ounces of gold annually.

Development spending has jumped from $256 million to $370 million due to higher than anticipated construction costs. Amax is still...